Barrett bill would prohibit credit card checks in hiring

Wednesday

Oct 21, 2015 at 11:36 AMOct 21, 2015 at 11:36 AM

State Sen. Mike Barrett, D-Lexington, testified on his bill to stop employers from using credit checks as part of the hiring process. Advocates for the poor highlighted his proposal as a way to provide relief for people experiencing financial hardships.

“Running credit checks on job applicants operates as an unfair barrier to employment,” Barrett said. “People can get low scores because of unavoidable circumstances -- because they’ve been laid off or become very ill.”

Barrett’s bill prevents employers from using credit reports for hiring purposes or from asking an applicant about his or her credit standing, except when federal or state law requires it.

Speaking in favor of the proposal in front of the Legislature’s Committee on Labor and Workforce Development were Chelsea Sedani of Crittenton Women’s Union, Nadine Cohen of Greater Boston Legal Services, Amy Traub of Demos and Gillian Mason of Massachusetts Jobs with Justice.

“This bill will put a stop to the vicious Catch-22 of employment credit checks, in which workers lose their jobs, can’t pay their bills due to lack of income, then can’t find another job due to bad credit records,” said Chi Chi Wu, National Consumer Law Center Staff Attorney. “There’s no solid research to show that a worker’s credit history is a reliable predictor of job performance or likelihood to commit fraud.”

Jobseekers who are out of work for months face a systemic problem. While the state’s job numbers are improving, the problem of long-term unemployment persists. According to the U.S. Bureau of Labor Statistics, 71,000 Massachusetts residents last year were considered long-term unemployed, averaging 34.9 weeks between jobs.

“I recently encountered this student: a mother of two who is pursuing a college degree while her husband was employed,” said Kathleen B. O’Neill, Director of Single Stop at Bunker Hill Community College, which helps students dealing with balancing financial challenges. “The father lost his job and credit cards were used to pay bills and to try and survive while he sought another position. At this point, the family is in jeopardy of losing their home due to non-payment of bills. Getting another job will now be extremely difficult for this family if a poor credit history can be used against this family who is striving to succeed.”

As part of a year-long study, Crittenton Women’s Union -- a group that advocates for low-income women -- named Barrett’s legislation as a top way to stop the cycle of poverty associated with severe debt, saying the practice of checking credit scores is “not a proven indicator for future job success” and “places undue hardship on low-income job seekers.”

“It’s a shame that those who are poor or are struggling in this economy have to worry that a would-be employer will run a credit check -- however irrelevant the results might be to the job,” Barrett said.

U.S. Senator Elizabeth Warren is pushing for a similar proposal on the national level. Meanwhile, ten other states have passed comparable measures. “This idea is gaining serious momentum,” Barrett said.